In the modern theory of the firm, an important difference between individuals and firms is that firms are:
A)producers.
B)not natural entities.
C)characterized by a production function.
D)employers.

Question

Quizplus · Accepted Answer

Individuals are natural entities while firms are not. Firms are created by humans through legal and economic arrangements, whereas individuals are part of the natural world. This distinction is important because it means that firms can be treated as separate entities with their own goals, objectives and decision-making processes, and can be analyzed using economic tools and theories.

In the Modern Theory of the Firm, an Important Difference